Dairy farmer had no defence in withholding payment for specialist equipment

About this case:

• Judgment:
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Justice Baker stated that on the facts of the case, the farmer’s reasons for withholding payment were more akin to a counterclaim, and in the interests of justice she could not set aside the judgment made in favour of the installation company.

In the protracted proceedings, Mr Michael Cashin acknowledged that he bought the milking equipment and that it was installed in his farm in 2011, however from the outset he experienced “significant problems” with the machinery and that he communicated this to the local agent of O’Donovan Dairy Services (ODDS).

He says that in October 2013 he informed ODDS that they should “take it out or put it right”.

By February 2014, ODDS issued the summary summons on Mr Cashin, seeking judgment of the balance claimed on foot of the contract for the supply of the goods in the sum of €153,215.00

Judgment was obtained, and ODDS registered a judgment mortgage against the interest of Mr Cashin in certain folio lands in Wexford, and in April 2016 obtained a garnishee order in respect of certain payments due to Mr Cashin from the Department of Agriculture.

In the present High Court proceedings, Mr Cashin sought relief pursuant to Order 13, rule 11 of the Rules of the Superior Courts setting aside that judgment, and an ancillary order vacating the order of garnishee.

Jurisdiction to set aside

Justice Baker stated that the “principles grounding the exercise of the jurisdiction to set aside a judgment were explained by the House of Lords in Alpine Bulk Transport Company Inc. v. Saudi Eagle Shipping Company Inc. , and have been accepted in a number of judgments of the Superior Courts in Ireland”.

The principles are fivefold:

(1) A plaintiff derives rights of property in a judgment.

(2) A jurisdiction lies in the discretion of the court to set aside its judgment.

(3) The purpose of the discretionary powers is to avoid injustice “if judgment followed automatically in default”.

(4) The primary consideration is whether the defendant has merits to which the court should pay heed, as a matter of common sense “since there is no point setting side a judgment if the defendant has no defence”.

(5) The court will take into account how a defendant found himself bound by a judgment of which he had no knowledge.

In McGuinn v. Commissioner of An Garda Síochána & Ors. it was stressed that the interests of justice must guide the court’s discretion: “The Courts in the interests of justice, lean in favour of a determination of litigation on the merits of the issues between the parties rather than preventing a party from having access to the Courts, when his or her rights or obligations are being determined, for procedural reasons including culpable delay.”

The Court in McGuinn set aside the judgment in default of defence, notwithstanding what it regarded as significant delay in bringing the motion, considering that delay would “…always be a material factor in deciding whether or not to grant the party guilty of delay discretionary relief, particularly if that relief would cause further undue delay to the other party”

Mooney v. The Old Shebeen Limited ; Fox v. Taher (Unreported, High Court, 24th January, 1996); O’Callaghan Limited v. O’Donovan (Unreported, Supreme Court, 13th May, 1997); Monaghan v. United Drug Plc. were also considered

Justice Baker stated that the “core of the jurisprudence with regard to the exercise by the court of its jurisdiction to set aside a judgment obtained in default is that the defendant be permitted to defend the proceedings and the judgment be set aside if it can be shown that he has a real or reasonable prospect of success”.

She added “the test is more than that which is required for a defendant to be permitted to defend proceedings brought by way of summary summons, which requires that a defendant show an arguable defence”.

Mr Cashin’s defence

The defence proffered by Mr Cashin was that the machinery he bought from ODDS did not function to his satisfaction, however Justice Baker stated that no evidence had been put before her “to suggest that the consideration for the contract wholly failed” or that there was any basis on which Mr Cashin “might have sought to rescind the contract for fundamental breach”.

Mr Cashin had the use of this machinery for five years and “had not said on affidavit that the machinery is useless or that he was unable to ever use it for the purposes of his dairy farming activity”. Accordingly, Justice Baker stated that the matters raised were akin to counterclaim - they did not offer him a defence to the claim in debt, nor did they offer him a basis on which he could say that the consideration for the contract failed.

“Legal principle and common sense” dictated that Mr Cashin should not have the judgment set aside if he would consequently find himself defending an action that even now he could not show he may reasonably hope to defend.

While accepting that Mr Cashin might have a counterclaim, Justice Baker stated that in the exercise of her discretion she could not ignore the delay of Mr Cashin in bringing the motion. While the authorities did not set out that delay of itself should prevent the exercise of discretion, a delay “prejudicial to the interests of the other party will always impact upon the exercise of its discretion by a court”.

Justice Baker stated that it would be unjust for ODDS to lose the benefit of its judgment mortgage and the garnishee order already made absolute by the High Court (Allied Irish Bank plc v. O’Reilly & Ors. IEHC 326 applied)

Accordingly, Mr Cashin’s application was refused.